CommerceWest Bank Reports Third Quarter 2018 EPS of $0.39, up 18%

Irvine, California – October 25, 2018 – CommerceWest Bank reported net income for the three months ended September 30, 2018 of $1,576,000 or $0.39 per common share, compared with net income of $1,345,000 or $0.33 per common share for the three months ended September 30, 2017, an EPS increase of 18%. Net income for the nine months ended September 30, 2018 of $4,245,000 or $1.04 per common share, compared with net income of $3,932,000 or $0.96 per common share for the nine months ended September 30, 2017, an EPS increase of 8%.

Key Financial Results for the three months ended September 30, 2018:

  • Interest income up 15%
  • Net interest income up 8%
  • Net income up 17%
  • EPS up 18%
  • ROA of 1.13%, up 16%
  • ROE of 10.24%, up 18%
  • Efficiency ratio of 56.57%
  • Net interest margin of 4.02%, up 7%
  • Loan growth up 18%
  • 35 quarters of consecutive profits

Key Financial Results for the nine months ended September 30, 2018:

  • Interest income up 14%
  • Net interest income up 8%
  • Net income up 8%
  • EPS up 8%
  • ROE up 10%
  • Efficiency ratio of 55.94%
  • Net interest margin of 4.08%

Mr. Ivo Tjan, Chairman and CEO, commented on the financial results, “CommerceWest Bank had good results for the third quarter. Earnings per share were up 18% for the quarter and up 8% for the year. We are pleased with the trends on return on assets and return on equity for the quarter of 1.13% and 10.24%. Loans are up 18% and deposits are up 5% year over year. The Bank’s net interest margin is on solid footing, with the margin over 4.0% for both the quarter and year.” Mr. Tjan continued, “There was positive deposit growth during the quarter resulting from our strategic initiatives and we expect to continue to see positive growth trends into the future. We remain focused on continuing to recruit talent and expanding our market share in California.”

Total assets increased $16.9 million as of September 30, 2018, an increase of 3% as compared to the same period one year ago. Total loans increased $64.7 million as of September 30, 2018, an increase of 18% over the prior year. Cash and due from banks decreased $51.8 million or 39% from the prior year. Total investment securities increased $1.8 million, an increase of 3% from the prior year.

Total deposits increased $26.1 million as of September 30, 2018, an increase of 5% from September 30, 2017. Non-interest-bearing deposits increased $381,000 as of September 30, 2018, an increase of less than one percent over the prior year. Interest bearing deposits increased $25.7 million as of September 30, 2018, an increase of 10% over the prior period.

Interest income was $6,108,000 for the three months ended September 30, 2018 as compared to $5,289,000 for the three months ended September 30, 2017, an increase of 15%. Interest income was $17,623,000 for the nine months ended September 30, 2018 as compared to $15,392,000 for the nine months ended September 30, 2017, an increase of 14%. Interest expense was $929,000 for the three months ended September 30, 2018 as compared to $514,000 for the three months ended September 30, 2017, an increase of 81%. Interest expense was $2,214,000 for the nine months ended September 30, 2018 as compared to $1,172,000 for the nine months ended September 30, 2017, an increase of 89%.

Net interest income for the three months ended September 30, 2018 was $5,179,000 as compared to $4,775,000 for the three months ended September 30, 2017, an increase of 8%. The net interest margin increased for the three months ended September 30, 2018. It increased from 3.75% in 2017 to 4.02% in 2018, an increase of 7%. Net interest income for the nine months ended September 30, 2018 was $15,409,000 as compared to $14,220,000 for the nine months ended September 30, 2017, an increase of 8%. The net interest margin increased for the nine months ended September 30, 2018. It increased from 4.03% in 2017 to 4.08% in 2018, an increase of 1%.

Provision for loan losses for the three months ended September 30, 2018 was $300,000 compared to $175,000 for the three months ended September 30, 2017, an increase of 71%. The provision for loan losses has increased during Q3 of 2018 due to the increase in loans outstanding. Provision for loan losses for the nine months ended September 30, 2018 was $1,855,000 compared to $1,030,000 for the nine months ended September 30, 2017, an increase of 80%.

Non-interest income for the three months ended September 30, 2018 was $634,000 compared to $678,000 for the same period last year, a decrease of 6%. Non-interest income for the nine months ended September 30, 2018 was $2,018,000 compared to $2,146,000 for the same period last year, a decrease of 6%.

Non-interest expense for the three months ended September 30, 2018 was $3,325,000 compared to $3,095,000 for the same period last year, an increase of 7%. Non-interest expense for the nine months ended September 30, 2018 was $9,857,000 compared to $8,957,000 for the same period last year, an increase of 10%. This expense increase was largely due to additional sales team members added during the first half of 2018 to assist with deposit acquisition.

The Bank’s efficiency ratio for the three months ended September 30, 2018 was 56.57% compared to 55.51% in 2017, which represents an increase of 2%.   The efficiency ratio illustrates that for every dollar the Bank made for the three-month period ending September 30, 2018, the Bank spent $0.57 to make it, as compared to $0.56 one year ago. The Bank’s efficiency ratio for the nine months ended September 30, 2018 was 55.94% compared to 53.60% in 2017, which represents an increase of 4%.

Capital ratios for the Bank remain well above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of September 30, 2018, the tier 1 leverage ratio was 10.53%, the common equity tier 1 capital ratio was 12.42%, the tier 1 risk based capital ratio was 12.42%, and the total risk-based capital ratio was 13.45%.

CommerceWest Bank is a California based full service commercial bank with a unique vision and culture of focusing exclusively on the business community.  Founded in 2001 and headquartered in Irvine, California.  The Bank serves businesses throughout the state with an emphasis on clients in Orange County, San Diego, Los Angeles, and Riverside Counties.   We are a full service business bank and offer a wide range of commercial banking services, including concierge services, remote deposit solution, online bankingmobile bankinglines of credit, working capital loans, commercial real estate loans, SBA loans, and treasury management services.

Mission Statement: CommerceWest Bank will create a complete banking experience for each client, catering to businesses and their specific banking needs, while accommodating our clients and providing them high-quality, low stress and personally tailored banking and financial services.

Please visit www.cwbk.com to learn more about the bank. “BANK ON THE DIFFERENCE”

Statements concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods, constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, loan production, balance sheet management, expanded net interest margin, the ability to control costs and expenses, interest rate changes, financial policies of the United States government and general economic conditions. The Company disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any forward-looking statements contained in this release to reflect future events or developments.